Li Xiang, CEO of Ideal Auto, began to "speak wildly" again.
Recently, just as Musk was talking about "earth transformation" at Tesla's investor day to reduce the assembly cost of next-generation models by 50%, a few hours later, on the other side of the world, Li Auto's spring media conference was in full swing.
Unlike Musk who wants to make people's demand crazy by cutting prices, Li Xiang's attitude towards price cuts is very rigid, and golden sentences are frequent.
"Cutting prices doesn't necessarily increase sales, but it can hit other companies."
"Cars are not sold as expensive as possible, nor are they as cheap as possible, and it is important to find the right price segment. If the ideal sells medium and large SUVs to more than 200,000, they may not be sold, and users will feel that they are cutting corners. ”
In the end, he concluded that the ideal car would not drop in price.
In a word, it immediately put the ideal on the opposite side of almost all new energy vehicle companies.
Since the end of last year, starting with Tesla, the new energy vehicle market has opened a round of vigorous price reductions, from the domestic boss BYD to Toyota Nissan and other Japanese cars, have followed up.
The latest development is that BBA has also started to reduce prices. On March 8, the news of the price reduction of 110,000 yuan in the Mercedes-Benz C-Class shocked the market. After the 4S store responded, the discount range was about 60,000, only limited to Beijing license plates.
Different from NIO Li Bin's low-key and He Xiaopeng's pragmatism, Li Xiang is like a "barrel of dynamite", often out of control, and explodes at one point.
On the surface, this is a failure of emotional management. Digging deep into it, you will find that all of Li Xiang's "loss of control" and sharpness come from the unsmooth journey of the ideal car. Moreover, there is no turning back arrow in the open bow.
Build a car all the way, "scold the street all the way"
Since the Internet has been available in historical materials, Li Xiang's verbal criticism has been recorded one by one. At that time, he used his words sharply than now.
As early as 2013, Li Xiang, who was in charge of Autohome, participated in a reality TV show. At the scene of the game, because the teammate's contract was not ready, only 4 of the 20 people printed the contract, Li Xiang directly furious, scolding his teammate "brain is in the water!" ”
After joining the car manufacturing business, Li Xiang's painstakingly managed SEV project (lightweight electric vehicle) was tragically aborted due to policy factors. So in October 2018, Li Xiang launched a high-end medium and large SUV - Li ONE, which is an extended-range electric vehicle, and the price of the new car is within 400,000 yuan before subsidies.
Unlike NIO and Xpeng, which achieved mass production through foundries, Li Auto made the intention of building its own factory at the beginning, and bought the production qualification of Chongqing Lifan Automobile for 650 million yuan at the end of 2018.
The self-built factory also resulted in the ideal final delivery time of up to 14 months, which was not completed until December 2019. Even when Ideal first bought the factory, NIO and Xiaopeng had already delivered the car.
In 2020, this is the big year of ideal car delivery, which should have been a big shot, but the reality is hitting a wall everywhere.
At the beginning of the epidemic, Li Auto suffered a supply chain disruption, so it had to delay delivery again, and many car owners abandoned orders. Immediately afterwards, as soon as the new subsidy policy came out, the price positioning of 328,000 yuan of ideal car unfortunately missed the subsidy column, and ideal car had to subsidize itself.
In addition, the ideal ONE has also fallen into a spontaneous combustion storm, which also makes the ideal car's range extender technology the focus of discussion.
Specifically, range extender technology is based on the "three electrics" (battery, electronic control, electric drive) at the core of pure electric vehicles, adding a set of range extender systems, which can directly charge the battery pack, thereby extending the cruising range.
But the disadvantages are also obvious: energy consumption is relatively high, and local licensing policies for extended-range electric vehicles are changing, for example, in Beijing, fuel vehicle indicators are required to be licensed.
This made Li Xiang feel painful.
So, at the ideal car user day held in Chengdu in 2020, Li Xiang scolded three "TMDs" in a row in response to the scene of others' doubts. “TMD！ A bunch of stinky technology, rushing us BB every day, what extended range electric is a backward technology. What fart technology did they TMD come up with?! Let a group of people who have no user thinking and do not care about users at all, study the technical route every day, what technical route is TMD? Sling the bull! ”
Despite his sharp words, Li Xiang himself is probably questioning himself. Otherwise, he would not have changed the "extended-range electric vehicle" from the public level to a "plug-in hybrid model".
In 2021, things didn't get any better. As of November 2021, Li Auto sold 76,404 units, slipping from second to third in 2020, behind Xpeng and NIO. In terms of monthly sales, the ideal was surpassed by Nezha Automobile twice in May and September.
Ideal ONE lacks stamina, and Ideal Auto encountered two major car owner rights protection incidents in 2021, "Leek Gate" and "Mercury Gate". In July 2021, in the face of the owner's questioning of the suspected mercury-like substance between the seats of the ideal ONE, Li Xiang cursed on Weibo again, "People and media who spread rumors about us using mercury, I wish you all have mercury flowing in your blood and mercury in your brains!" ”
In August of the same year, Li Auto landed on the Hong Kong stock market and broke on the first day of listing.
Price war: roll does not move, lying uneven
Li Xiang's last "poisonous tongue" was at a recent spring media conference. "Cutting prices doesn't necessarily increase sales, but it can hit other companies," he said. ”
Insisting on not reducing prices is because Li Xiang himself knows that 20% gross profit margin is a red line, can not be lowered, and then reduce the healthy development of the enterprise will have problems. But on the other hand, looking at the competition around him, there are price wars all the time, but he can't stop it.
According to Li Auto's 2022 financial report, although the annual revenue was 45.29 billion yuan, a year-on-year increase of 67.7%, the annual net loss also reached 2.032 billion yuan, nearly 6 times larger than the 320 million yuan in the same period of the previous year.
What makes Li Xiang even more anxious is that in 2022, Li Auto will deliver a total of 133,200 vehicles, which is equivalent to a loss of 15,300 yuan when selling a car.
As a serial entrepreneur, one of the financial metrics that Li Xiang cares about is gross margin. In Q4 2022, the gross profit margin of Li Auto was 20.2%, and the gross profit margin for the whole year was about 19.4%.
However, in longitudinal comparison, the performance of Ideal 2022 is not better than in 2021, and the gross margin for the whole year is 2 percentage points lower than that in 2021.
He bluntly said that Tesla and BYD can maintain a gross profit margin of 20% even if they reduce prices on a large scale. In order to ensure the necessary investment in research and development, the ideal car must maintain a high gross profit margin.
According to the financial report, the ideal R&D investment in 2022 reached RMB6.78 billion, a year-on-year increase of 106.3%, and sales, general and administrative expenses for market expansion also increased by 62.2% year-on-year to RMB5.67 billion.
In addition to the financial report, accidents such as steering wheel failure and air suspension fracture frequently appeared, and the replacement triggered large-scale rights protection of car owners, and President Shen Yanan announced his resignation after the release of the third quarterly report, and many negative events ran through the 2022 of Ideal Auto. Coupled with Tesla's price war at the end of the year, it stirred up a battle royale in the new energy vehicle market.
So Li Xiang pessimistically predicted that 2023 to 2025 will be a brutal knockout game, because there is no need for so many companies.
The knockout round is coming, and the price war is the first. Li Xiang himself said: "The most stressful point in this industry is that the top two companies can fight price wars." This is simply not seen in mobile phones and various industries. ”
For Li Xiang, the most difficult thing is that he can't roll up and lie down.
To have a future, first ensure that the car can be sold
There is such a car selling joke circulating on the Internet.
New forces: a car sold for 200,000.
User: Can it be cheaper? Come at cost price.
New Force: Oh, the 250,000.
Throughout the entire industry, only the head Tesla and BYD can make money, which fully shows the fierce competition in the market. If other car companies fail to form their own unique advantages, there is likely to be a serious capital crisis, as the recent WM Motor has demonstrated.
The picture shows Shen Hui, founder of WM Motor
For the ideal car, relying on an ideal ONE, the ideal achieved "from 0 to 1" and entered the stage of "from 1 to 10".
Li Xiang's new goal is to win 20% of the luxury SUV market share of 300,000-500,000 yuan this year, and occupy 35% of the passenger car market of more than 200,000 yuan by 2027.
One reference data is that in 2022, Ideal sold 133,000 vehicles, which did not meet the previous target of 170,000 units. To cut more cakes, what does Lee want to rely on?
At present, it seems that the "matryoshka doll" sales strategy of L7, L8 and L9, as well as the expanding stores in third- and fourth-tier cities, are the key to increasing sales.
Li Auto is developing two high-voltage pure electric vehicle platforms, Whale and Shark, and plans to launch at least two high-voltage pure electric models every year from 2023.
Li Xiang said that the pure electric 800-volt high-voltage platform model launched in the future can achieve the same price as the range extension model. Battery costs have been reduced, efficiency has been significantly improved, and the overall cost can be reduced by about 30,000-40,000 yuan compared with models of the same size.
In terms of supply chain, Ideal has also made a series of inputs. For example, in October 2021, a joint venture company, Li Xinchen Technology, was established in Mianyang, Sichuan Province as the production base of range extenders for key components; The silicon carbide power semiconductor design base in Suzhou will be officially put into operation in 2024. In addition, Beijing's green intelligent production base is also progressing smoothly, and pure electric models of high-voltage platforms will be mass-produced here.
When NIO deeply makes efforts to change power, Xiaopeng all in automatic driving, when Qianjie, Nezha and so on are in hot pursuit, the ideal must also show innovation and strength, otherwise it will be difficult to survive in the cruel knockout competition.
Entering 2023, the ideal car finally has a little momentum to pick up. Specifically, Li Auto delivered 15,141 units in January, a year-on-year increase of 23.4%; Deliveries in February reached 16,620 units, a year-on-year increase of 97.5%, and the number of deliveries exceeded 10,000 for six consecutive months.
A historic breakthrough was that on February 27, 2023, the ideal market capitalization surpassed the sum of NIO and Xpeng for the first time, reaching HK$197.72 billion.
Li Xiang once said, "I live to control my destiny and challenge the limits of growth, so I will definitely choose the largest industry and the most difficult field to do, and use the results to verify." ”
As of the fourth quarter of last year, Ideal Cash Reserve still had 58.45 billion yuan.
For Li Xiang, whether he scolds the street or not, the realistic goal is clear: to ensure that he is not eliminated before the blood tank runs out.